Worldwide IT Spending Set to Rebound in Second Half of 2017, Led by
Cloud and Mobile Upgrade Cycles, According to IDC

July 12, 2017 01:42 PM Eastern Daylight Time

FRAMINGHAM, Mass.--(BUSINESS WIRE)--Worldwide IT spending is expected to increase by 4.5% in 2017 in
constant currency terms, a significant improvement on last year’s growth
of 2.5%, with stronger upgrade cycles for infrastructure and mobile
devices leading the improvement in the second half of the year.
According to the latest edition of the International Data Corporation (IDC)
Worldwide
Black Book, total IT spending this year will reach $2.1 trillion and
is forecast to increase by another 4% in 2018 as positive momentum
continues into next year. Including telecom services, which will
increase by just over 2% in constant currency terms this year, the
overall ICT market will reach $3.5 trillion in 2017.

The strongest growth this year will come from infrastructure hardware,
enterprise software, and mobile devices. With cloud service providers
expected to accelerate their datacenter investments in order to keep
pace with growing demand for cloud services, total server spending will
increase by 4% this year and 5% in 2018. Enterprise spending on server
and storage infrastructure will also pick up in the second half of 2017,
driven by product refresh cycles. Meanwhile, demand for Infrastructure
as a Service (IaaS) will remain robust, with spending set to exceed $25
billion this year and more than $50 billion by 2020.

Smartphone Sales Will Improve Compared to 2016

Last year saw a significant slowdown in the smartphone market, as
increasing maturity and price competition affected many markets.
Stronger growth is expected in the second half of 2017, as premium
vendors launch significant new products while smartphone penetration and
value continues to grow steadily in key emerging markets including
China. Overall smartphone spending will increase by 7% this year to $439
billion, a big improvement on last year's 1% growth.

"Cloud and mobile are still the big drivers for IT spending, despite the
attention devoted to new technologies like augmented reality, artificial
intelligence, and robotics," said Stephen
Minton, vice president, Customer
Insights & Analysis. "New technologies will drive a larger share
of market growth in the next 5-10 years, but the short term will also
see a resurgence of growth in markets tied to 3rd Platform
opportunities, including cloud services, mobility, and big data."

Software Spending is Strong, Services Market is Stable

Software spending will increase by 7% this year to more than $471
billion in constant currency, driven by continued enterprise investment
in big data and analytics alongside ongoing adoption of
Software-as-a-Service (SaaS) and other key growth segments. Meanwhile,
IT services spending will post growth of 3% this year, led by
project-oriented services. In telecom services, growth will still be
driven by fixed and mobile data services while voice revenues continue
to decline.

"While overall market momentum is set to improve, some technologies will
continue to drag on industry growth in the near term," said Minton.
"High-end servers are expected to post another year of double-digit
decline this year, while hardcopy peripheral spending will fall for the
second year in a row. Overall tablet spending will also decline again,
despite improving sales of hybrid and detachable models, while sales of
traditional PCs and external storage systems will be broadly flat. This
year will also see slowing growth for enterprise network equipment and
traditional outsourcing services. For vendors still relying on 2nd
Platform technologies for their revenue and growth, the market will
remain challenging."

Asia/Pacific Will Lead Growth, Led by China and India

Asia/Pacific (excluding Japan) will post the strongest regional growth
in IT spending this year, set to increase by 8% in constant currency
terms, followed by the United States (4%). China and India are both
expected to post overall IT spending growth of 10% in constant currency
terms this year, although China is likely to see a moderating pace of
growth in the next few years as the economy begins to slow. IT spending
growth will be weaker but stable in Western Europe (3%), Canada (2%),
and Japan (2%) as mature economies continue to face headwinds including
Brexit and demographic challenges.

Emerging Markets Are Recovering Slowly

Emerging markets including Brazil, Turkey, and Nigeria, will show
improvements compared to 2016, but will remain sluggish by historical
standards. While the United States remains the largest IT market, China
is now the largest single market for devices and will account for almost
25% of all spending on PCs, tablets, phones, and peripherals this year.

International Data Corporation (IDC) is the premier global provider of
market intelligence, advisory services, and events for the information
technology, telecommunications, and consumer technology markets. With
more than 1,100 analysts worldwide, IDC offers global, regional, and
local expertise on technology and industry opportunities and trends in
over 110 countries. IDC's analysis and insight helps IT professionals,
business executives, and the investment community to make fact-based
technology decisions and to achieve their key business objectives.
Founded in 1964, IDC is a wholly-owned subsidiary of International Data
Group (IDG),
the world's leading media, data and marketing services company that
activates and engages the most influential technology buyers. To learn
more about IDC, please visit www.idc.com.
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